Kerrigan v. Merit Systems Protection Board
833 F.3d 1349 (Fed. Cir. 2016)
Authored by Gil Landau
Statement of Facts: Phillip Kerrigan was an employee of the Department of the Navy between 1985 and 1986. He injured himself while working and accordingly was granted workers’ compensation benefits (“benefits”) by the Department of Labor (“DOL”). Starting in 1993, Kerrigan raised concerns about the DOL’s administration of his benefits. Among other concerns, Kerrigan complained about not being able to see his preferred physician, Dr. Webber. In 2001, Kerrigan saw an orthopedic surgeon who determined Kerrigan could return to work with restrictions and referred Kerrigan to vocational rehabilitation.
On November 21, 2001, Kerrigan sent the DOL Office of Inspector General (“OIG”) a letter alleging that the department’s refusal to let him see Dr. Webber was based on a DOL employee illegally falsifying and destroying a physician election form. The OIG declined to investigate and forwarded Kerrigan’s complaint to the DOL. On December 18, 2001, the same day the DOL received the OIG’s letter, the DOL referred Kerrigan to vocational rehabilitation. Kerrigan refused to attend. On March 19, 2002, the DOL reduced Kerrigan’s benefits to zero due to his refusal to attend vocational rehabilitation. Kerrigan appealed this decision to the Employees Compensation Appeals Board, which affirmed the DOL’s decision in 2003. In 2013, Kerrigan filed a complaint with the Office of Special Counsel (“OSC”). The OSC declined to investigate but, construing his allegations as a whistleblowing complaint, referred it to the Merit Systems Protection Board (“MSPB”). In 2014, Kerrigan filed an Individual Right of Action (“IRA”) before the MSPB, alleging that his benefits were terminated due to his November 21, 2001 whistleblower letter to the DOL OIG.
Procedural History: The MSPB administrative judge (“AJ”) found that the MSPB did not have jurisdiction because the Whistleblower Protection Act (“WPA”) only protects employees from actions taken by their own agency and Kerrigan did not work for the DOL.
Kerrigan appealed to the MSPB’s Board. The Board affirmed the AJ’s holding on separate grounds. The Board explained that it had no jurisdiction because Kerrigan was challenging benefits determinations and 5 U.S.C. § 8128(b) provides that the DOL makes final and unreviewable determinations regarding benefits. Moreover, even if it was within the Board’s jurisdiction, Kerrigan failed to make non-frivolous allegations that his protected disclosures were a contributing factor in the DOL’s decision to terminate his benefits. Kerrigan appealed the Board’s decision to the Federal Circuit.
Question Presented: First, does 5 U.S.C. § 8128(b) prohibit the MSPB from exercising jurisdiction under the WPA over an allegedly retaliatory termination of workers compensation benefits?
Second, did the appellant make sufficient, non-frivolous allegations of retaliation to establish the MSPB’s jurisdiction under the WPA?
Holding: The Federal Circuit held that the termination of workers’ compensation benefits is within the jurisdiction of the MSPB under the WPA, while affirming the Board’s dismissal due to lack of sufficient, non-frivolous allegations of retaliation. The court held that although the DOL’s decisions to grant or deny benefits are final, this does not bar review of benefits determinations on other grounds, such as the WPA. However, the court agreed that Kerrigan failed to make non-frivolous allegations that his protected disclosures were a contributing factor in the DOL’s decision to terminate his benefits. Accordingly, the court held that the MPSB lack jurisdiction under the WPA.
Reasoning: The court explained that, although under § 8128(b) DOL benefits determinations are “final and conclusive” and “not subject to review . . . by a court . . . .,” this only applies to a DOL decision as it relates to an individual’s eligibility for payment. However, § 8128(b) does not bar the MSPB from acting within its own jurisdiction even when the facts that relate to the MSPB’s decision may overlap with those in the DOL’s decision. The court clarified that the question of an individual’s eligibility for DOL benefits is separate from the question of whether the DOL retaliated against him by terminating those benefits in violation of the WPA. Moreover, termination of benefits due to whistleblowing can be a violation under the WPA despite the lack of an employment relationship between the whistleblower and the retaliating agency.
Nonetheless, a petitioner needs to establish that the MSPB has jurisdiction by exhausting remedies before the OSC as well as non-frivolously alleging that (1) the petitioner made a 5 U.S.C. § 2302(b)(8)(A) protected disclosure and that (2) it was a contributing factor for a § 2302(a) prohibited personnel action. Cahill v. Merit Systems Protection Board, 821 F.3d 1370, 1373 (Fed. Cir. 2016). Here, the Board held that Kerrigan failed to establish that the official terminating his benefits had any knowledge of his protected disclosure, despite the protected disclosure being sent to the agency. Thus, Kerrigan did not non-frivolously allege his protected disclosure was a contributing factor.
The court acknowledged that Kerrigan’s protected disclosure to the OIG was sent to the DOL on the same day that the DOL ordered Kerrigan to attend vocational rehabilitation (which led to the termination of his benefits). However, the court explained that while proximity in time can indicate that there is knowledge, it is not sufficient for jurisdiction. The court held that a non-frivolous allegation cannot solely rely on the inference that a decision-making official had knowledge due to temporal proximity. While Kerrigan was not required to prove that the decision-making official knew of his protected allegation, Kerrigan was required to allege that a decision-making official had knowledge. Moreover, the court refused to infer knowledge after considering that the DOL’s requirement for vocational rehabilitation arose a few months after a physician recommended Kerrigan return to work.